US Attorneys General Jump On The Lieborgate Bandwagon; 900,000+ Lawsuits To Follow, And What Happens Next?

The second Barclays announced its $450 million Libor settlement, it was all over – the lawyers smelled not only blood, but what may be the biggest plaintiff feeding frenzy of all time. Which is why it was only a matter of time: “State attorneys general are jumping into the widening scandal over whether banks tried to manipulate benchmark international lending rates, a move that could open a new front against the top global banks. A handful of state attorneys general said they are looking into whether they have jurisdiction over the banks, and are starting preliminary discussions to determine what kind of impact the conduct involving the Libor rate may have had in their states.”

From Reuters:

“Our office is aware of the allegations around the manipulation of the Libor, and we are working with other state agencies to determine whether Massachusetts has suffered any losses as a result,” a spokesman for Massachusetts Attorney General Martha Coakley said. A spokesman for Florida Attorney General Pam Bondi said his office is aware of the recent settlement reached by British bank Barclays with U.S. and UK authorities and “will look at the case to the extent that our office might have any jurisdiction in the matter.”

A spokeswoman for the Massachusetts transportation authority, MassDOT, said the agency “is actively investigating its portfolio for the purpose of determining if it was underpaid on its bonds due to the brewing Libor situation,” as are many other issuers of debt whose rate is governed by Libor.

Lawyers for several states have had early discussions about whether they might pool investigative resources and launch a broader, multi-state effort, but no formal consortium has been established yet, people familiar with the discussions said. New York might be expected to lead such an effort, since most of the banks’ U.S. operations are based there. A spokesman for the New York attorney general declined comment on whether the issue is being looked at.